Best-value contracting is a procurement process allows owners to consider other factors in addition to price in the award and execution of construction contracts. These key factors can be considered in the evaluation and selection process to minimize impacts and enhance the long-term performance and value of construction.
Traditionally, price has been the sole factor considered in selection of construction contractors by state departments of transportation. Best-value procurement allows other factors, such as qualifications, schedule, quality, and performance-based criteria, to be used in evaluation and selection. MnDOT and the FHWA do not consider the use of A+B, lane rental, or incentive/disincentives as best-value.
MnDOT currently has best-value authority for design-bid-build and design-build projects.
When to use best-value contracting
- Useful when a project has unique objectives or challenges that may be difficult to meet using traditional low-bid procurement
- Price must always be a factor in selection
- Can be useful to have Bidders identify risks and mitigation strategies Ideal for projects that significantly affect traveling public
- Useful with pre-qualification of workforce or key leadership positions
- First cost can be lowered through Contractor innovation
- Cannot guarantee the success of a project
- Should not be used as a vehicle for restricting competition or applying arbitrary or unreasonable discretion in the selection of contractors
- Will not resolve existing administration problems or remedy unclear specifications
- May take longer than a traditional low-bid process, depending on how much time is provided to prepare proposals
- May require additional agency effort for the preparation of bid documents and evaluation of proposals
- May increase the costs to the industry to prepare and submit bids for the project
- May increase the project cost if selection is based on higher quality or an increased effort by the contractor